Pretty much everything regarding Pikachu has been said.
Atrocious grab range (though with nice rewards), poor range overall, and unusable shield (his most notable weakness to me; it's really just better to CC, you're going to get hit either way; terrible grab and rolls just make it worse, but USmash/UAir/Nair/Wavedash back for spaced Fsmash can cover for those).
The only moves necessary to his playstyle are specials (although, even for recovery, Skull Bash can generally be went without; and it's not really much harder to win without Thunder, just takes longer and is less flashy/fun), smashes (though again, DSmash stands out as only borderline important), Nair, Uair, Bthrow, Dthrow/UThrow depending on opponent, and a single tilt of your choice for quick range (they're effectively interchangeable, and can often be replaced with a well spaced/timed FSmash).
The others are just meh, and it's always the safer bet (not always optimal, but more likely to be so) to just use one of the ones listed above. So, he has plenty of places where options can be added as they're deemed necessary.
I think, if given all Pichu's advantages, some Brawl improvements, and a couple of 64 moves, Pikachu:M would be pretty much perfect balance- and playstyle-wise. To me, that means Melee High tier, Pro:M Mid tier.